Consolidated Earnings

Consolidated Profit and Loss Statement

The consolidated profit and loss statement of the Continuing Operations reflects the seasonality in tourism, with positive operating results primarily generated in the third and fourth quarter, i.e. the summer season, for seasonal reasons. Earnings by Continuing Operations reflected the adverse earnings effect caused by the closure of European airspace due to the volcanic eruption in Iceland in April 2010. This effect was partly offset by the strengthening of Sterling against the Euro.

Turnover and cost of sales   
Turnover comprised the turnover of the Continuing Operations, i.e. Tourism and Central Operations. In the third quarter of 2009/10, turnover declined by 4% year-on-year to €4.0bn. In the first nine months of 2009/10, the year-on-year decline was 9%. It was primarily attributable to lower business volumes in TUI Travel in the wake of the cancellations of holidays due to the ash cloud. Turnover was presented alongside the cost of sales, which decreased in line with the declin­ing business volume. A detailed breakdown of turnover and the development of turnover are presented in the section ‘Consolidated turnover and earnings’.

Gross profit   
At €331m, gross profit as the balance of turnover and the cost of sales decreased by €59m year-on-year in the third quarter of 2009/10. For the nine-month period, gross profit amounted to €520m, down €24m year-on-year.

Administrative expenses   
Administrative expenses comprised expenses not directly allocable to the turnover transactions, such as expenses for general management functions. At €427m, they were up €85m year-on-year in the third quarter. This increase was mainly driven by expenses incurred in connection with the impact of the closure of European airspace and the year-on-year strengthening of Sterling against the Euro. For the first nine months, the corresponding expenses also rose year-on-year to €1.1bn.

Other income/Other expenses
The balance of Other income and Other expenses totalled €30m in the third quarter of 2009/10, up €32m year-on-year. This increase was mainly attributable to other income from currency gains in connection with capital reductions in foreign subsidiaries. A year-on-year rise of €21m to €38m was recorded for the first nine months of 2009/10.

Impairment of goodwill   
No goodwill impairment charges were carried for the third quarter of 2009/10 or the nine-month period. In the previous year, impairments of goodwill were required in the hotel sector for the first nine months of the year.

Financial result   
The financial result comprised the interest result and the net result from marketable securities. At €-69m, it improved by €351m year-on-year in the third quarter of 2009/10 and comprised financial income of €40m, down €11m, and financial expenses of €108m, down €362m. In the prior-year comparative period, financial expenses had been impacted by the measurement of the loans granted to Container Shipping totalling €371m. In the first nine months of 2009/10, the financial result improved by €386m year-on-year. It included interest effects of €31m from the measurement of the loans and hybrid capital granted to Container Shipping using the effective interest method. 

Share of results of jointventures and associates   
The share of results of joint ventures and associates comprised the share in net profit for the year of the associated companies and joint ventures. In the third quarter of 2009/10, the share of result of joint ventures and associates rose €121m year-on-year to €73m. For the nine-month period under review, it grew by €108m year-on-year to €57m. This increase was primarily attributable to the measurement of the 43.33% stake in Container Shipping retained by the TUI Group as an associated company in the consolidated financial statements. In the third quarter of 2009/10, the share of result of Container Shipping amounted to €75m. The cumulative share of result for the first nine months was €66m.

Underlying EBITA from Continuing Operations
In the third quarter of 2009/10, underlying earnings by the Continuing Operations totalled €105m, up €10m year-on-year. Cumulative underlying earnings for the first nine months totalled €-280m, up €24m year-on-year. EBITA was adjusted for gains on disposal, restructuring expenses, purchase price allocations and one-off items. The development of earnings and the adjustments are outlined in detail in the section ‘Consolidated turnover and earnings’ and the comments concerning the development of business.

Income taxes
Income taxes comprised taxes on profits from the business activities of the Continuing Operations. Tax income of €26m arose for the third quarter of 2009/10, following tax expenses of €27m in the prior-year comparative quarter. Cumulative tax income for the first nine months totalled €171m, following €91m in the previous year’s comparative period. In the previous year, the tax income was relatively low in relation to earnings. This was attributable to a negative share of result of Container Shipping and charges resulting from the measurement of the loans granted to Container Shipping.

Result from Discontinued Operation
The result for the periods under review for the current financial year did not comprise any results from Discontinued Operation since the activities of the Magic Life hotel club chain previously carried under this item will now be shown under TUI Hotels & Resorts until they will be transferred to TUI Travel PLC. The results carried for the prior-year periods related to the sale of Container Shipping. A detailed breakdown of this item is provided in the section ‘Result from Discontinued Operation’ in the notes.

Group loss   
In the third quarter of 2009/10, the Group result was negative at €-36m (previous year: €-457m). The year-on-year decline in the Group loss was mainly attributable to lower financial expenses, which had included a one-off expense for the measurement of the loans granted to Container Shipping in the prior year. The year-on-year increase in the Group loss in the first nine months of 2009/10 was attributable to the book profit from the sale of Container Shipping, included in the result for the previous year’s comparative quarter.

Minority interests   
Minority interests amounted to €-27m for the third quarter of 2009/10 and €13m for the nine-month period. They related to the minority shareholders of TUI Travel PLC and companies in the TUI Hotels & Resorts sector.

Earnings per share

After deduction of minority interests, TUI AG shareholders accounted for €-9m (previous year: €-470m) of the Group result in the third quarter of 2009/10. As a result, basic earnings per share amounted to €-0.06 (previous year: €-1.89) in the third quarter and €-1.23 (previous year: €+0.41) for the first nine months of 2009/10.

Performance indicators

Key figures of Profit and Loss Statement of the Continuing Operations